Hard to tell from the pic. By any chance did you scrape the skin off of some of the roots to see if the roots were still alive? Are the small feeder roots brittle? From the color of them, it appears to me that they may be still alive. If so then what happened was the graft died and that could be due to many causes. It also appears that the roots were growing in a circle which is a sign of the tree being root bound when planted. This didn't kill the tree however but could have had a serious effect a few years from now. It appears that the tree was planted at the correct depth although I can't be positive about this because of the weeds and dirt hiding part of the trunk. Wash off all of the dirt and take another picture. This will give us a better idea of what happened.
